Total Revenue Increased 70%, Deferred Revenue Increased 59% Year-over-Year
Representing Compounding Natural Organic Growth & Stellar Customer Retention
RESEARCH TRIANGLE PARK, NC, March 24, 2021 (GLOBE NEWSWIRE) -- Data443 Risk Mitigation, Inc. (“Data443” or the “Company”) (OTCPK: ATDS), a leading data security and privacy software company, today announced operating results for the year ended December 31, 2020.
Recent Business Accomplishments:
- Entered into a new collaboration with the leader in the cloud data warehouse market, Actian Corporation.
- Further integrated ClassiDocs™ into Microsoft products with membership in the by invite only Microsoft Intelligent Security Association (MISA) in late 2020.
- Executed a multi-year, six-figure subscription-based agreement with a leading U.S.-based insurance company for our Data Archiving product set.
- Awarded a six-figure per year, three-year contract with a leading global bank headquartered in the Middle East, servicing the bank’s more than 10,000 employees for our classification product suite.
- Retired all outstanding debt liabilities with a variable conversion rate feature, resulting in the elimination of over $10,000,000 in derivative liabilities.
- Completed our first acquisition of 2021, acquiring all rights to ArcMail®, the culmination of the prior two-year licensing agreement held by Data443.
- Retired over $5 Million of convertible debt since the start of 2020.
Business Highlights for the Fourth Quarter of 2020:
- Acquired Resilient Access™ from Resilient Network Systems, a Silicon Valley-based SaaS platform that performs SSO and adaptive access control ”on the fly” with sophisticated and flexible policy workflows for authentication and authorization. Resilient Access, their flagship product we acquired in the transaction, is secured by patent-protected Box.Net for Fortune 50 companies.
- Acquired assets of IntellyWP, an Italy-based developer that produces WordPress plug-ins, which specializes in experience enhancements of more than 170,000 active installations worldwide and over 1.5 million downloads.
- Integrated the FileFacets™ technology and staff into the Data443 family. Completed services engagements and liquidated non-related IP assets at a positive margin. Re-onboarding existing customers; integrating aggressive technology capabilities into ClassiDocs and Archiving Manager capabilities. Submitting existing Patent Pending IP for Patent approvals.
- Announced the official release of a substantial enhancement for DataExpress®, utilizing Google-based Two-Factor Authentication solution actively deployed in a Fortune 100 customer to conform to upgraded security mandates.
Management Commentary:
Jason Remillard, Data443’s founder and Chief Executive Officer, commented, “Fiscal 2020 represented a year of strategic progress and record performance against an unprecedented backdrop, and I’m extremely proud of our results for 2020. We realized significant growth in revenue and deferred revenues. Importantly, our deferred revenues continue to grow, which is a strong indicator of our future revenue trends. I’m happy to report that our capital structure is in the best position it’s ever been, as we spent a significant portion of 2020 addressing our outstanding convertible debt, which dovetailed into the Company’s first equity financing transaction in December. We successfully reduced our derivative liabilities by over $10 million while growing our business with an impressive slate of acquisitions throughout 2020. When other companies in our industry were forced to reduce and contract their operations or overpay for acquisitions with questionable financial metrics, we expanded our business in a financially prudent manner. We managed to acquire three distinct companies, open an office in Dubai, continue organic growth, and close net new business. These actions only further validate our business plan and the foundation we established and have continued to build upon since 2018.”
“We wouldn’t have been able to achieve many of these key milestones without our incredible and growing Data443 team. Throughout the pandemic, we didn’t miss a beat in delivering mission-critical services to our customers. These customers represent a wide range of industries, including those considered as essential services, along with education and banking. Because of these efforts, I’m proud to report that our 2020 customer retention rate exceeded 98%. This reinforces the essential role Data443 plays in our customers’ operations, which bodes very well for our future growth.”
“Looking forward to the rest of 2021, we expect to see continued strong demand in data security, which reflects the continued risk environment from hacking and ransomware infections. Also, we anticipate a growing regulatory environment that will further compel businesses to deploy security measures for customer data. While not entirely immune to economic factors, the data security and privacy market should remain strong as more businesses accept that they must allocate resources for data security. We’re continuing to invest in our staff and technology to meet this growing demand.”
“As we announced in February, we have filed our Schedule 14C with the Securities and Exchange Commission, as we take the necessary steps to rationalize our capital structure in preparation for our application to up-list our stock to a superior market. We’re excited to take these steps and believe these actions are in the best interest of our shareholders. Included in our recently filed Form 10-K you will note subsequent events following the reporting period of December 31, 2020. Please do take the time to review these as they are important to our next steps for the Company.” The 10-K can be found at the following link: https://www.sec.gov/Archives/edgar/data/1068689/000149315221006652/form10-k.htm
Remillard concluded by stating, “As you can imagine, I remain highly confident in our business case with our continually expanded solutions offering that is anchored in solid security capabilities that deliver uniquely advanced privacy functions for organizations of all sizes that are unmatched in today’s marketplace. Our suite of products and services secures our competitive positioning, differentiating us from the competition, and keeps us in a leadership position as we move into 2021. Our recent successes of several high-ticket contracts, along with our recent acquisition of ArcMail®, sets the stage for the remainder of 2021. Analysts, customers, competitors, and partners are taking note. Together with a growing portfolio of diverse customers, greater access to financial resources, and a growing sales pipeline with an outstanding team of professionals, we are poised for even greater heights in 2021.”
Fiscal Year 2020 Financial Results:
- Net billings of $3,078,000 for the year ended December 31, 2020, compared to $2,847,000 net billings for the prior ended December 31, 2019 – representing an increase of 8.1%. Total revenues were $2,475,000 during the year ended December 31, 2020, compared to $1,453,000 of revenue for the year ended December 31, 2019 – representing an increase of 70%. Total deferred revenues were $1,518,000 as of December 31, 2020, compared with $954,000 deferred revenues for the year ended of December 31, 2019 – representing an increase of 59%.
- General and administrative expenses for the year ended December 31, 2020, were $5,831,000, compared to $4,797,000 for the year ended December 31, 2019, an increase of $1,034,000 – representing an increase of 22%. The increase in general and administrative expense was primarily due to an increase in amortization of intangible assets, payroll expense, professional fees, and other expenses related to SEC reporting, including the re-classification of sales-related management expenses, in connection with the projected growth of the Company’s business.
- The net loss for the year ended December 31, 2020 was $13,907,000 compared to a loss of $607,000 for the year ended December 31, 2019.
- The net loss for the year ended December 31, 2020 was mainly derived from an operating loss of $3,900,000, interest expese of $2,518,000 and loss on change in fair value of derivative liability of $7,406,000. The net loss for the year ended December 31, 2019 was mainly derived from an operating loss of $3,934,000, due in part by increased general and administrative costs, and reduced by other net income of $3,327,000, which was mainly from a gain on change in fair value of derivative liability.
Liquidity
As of December 31, 2020, we had cash in the amount of $58,783 and trade accounts receivable of $136,503, compared to cash of $18,673, trade accounts receivable of $63,556, inventory of $8,301 and other current assets of $807 as of December 31, 2019.
About Data443 Risk Mitigation, Inc.
Data443 Risk Mitigation, Inc. (OTCPK: ATDS), is the de facto industry leader in Data Privacy Solutions for All Things Data Security™, providing software and services to enable secure data across local devices, network, cloud, and databases, at rest and in flight. Its suite of products and services is highlighted by:
(i) Sensitive Content Manager (ARALOC™), which is a market-leading secure, cloud-based platform for the management, protection, and distribution of digital content to the desktop and mobile devices, which protects an organization’s confidential content and intellectual property assets from leakage — malicious or accidental — without impacting collaboration between all stakeholders;
(ii) Data Archive Manager (ArcMail®), which is a leading provider of simple, secure and cost-effective email and enterprise archiving and management solutions;
(iii) Data Identification Manager (ClassiDocs™ and FileFacets®), the Company’s award-winning data classification and governance technology, which supports CCPA, LGPD, and GDPR compliance in a Software-as-a-Service (SaaS) platform that performs sophisticated data discovery and content search of structured and unstructured data within corporate networks, servers, content management systems, email, desktops, and laptops;
(iv) ClassiDocs™ for Blockchain, which provides an active implementation for the Ripple XRP that protects blockchain transactions from inadvertent disclosure and data leaks;
(v) Data443™ Global Privacy Manager™, the privacy compliance and consumer loss mitigation platform which is integrated with ClassiDocs™ to do the delivery portions of GDPR and CCPA as well as process Data Privacy Access Requests – removal request – with inventory by ClassiDocs™;
(vi) Data Placement Manager (DATAEXPRESS®), the leading data transport, transformation and delivery product trusted by leading financial organizations worldwide;
(vii) Access Control Manager (Resilient Access™), which enables fine-grained access controls across myriad platforms at scale for internal client systems and commercial public cloud platforms like Salesforce, Box.Net, Google G Suite, Microsoft OneDrive and others;
(viii) Data443™ Chat History Scanner, which scans chat messages for Compliance, Security, PII, PI, PCI & custom keywords;
(ix) the GDPR Framework WordPress plugin, with over 30,000 active users and over 400,000 downloads it enables organizations of all sizes to comply with the GDPR and other privacy frameworks;
(x) The CCPA Framework WordPress plugin, which enables organizations of all sizes to comply with the CCPA privacy framework;
(xi) LGPD Framework WordPress plugin, which enables organizations of all sizes to comply with the Brazilian GDPR/LGPD privacy rules; and
(xii) IntellyWP, a leading purveyor of user experience enhancement products for webmasters for the world’s largest content management platform, WordPress.
For more information, please visit http://www.data443.com.
Forward-Looking Statements
The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements. The statements in this press release that are not historical statements, including statements regarding Data443’s plans, objectives, future opportunities for Data443’s services, future financial performance and operating results and any other statements regarding Data443’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities laws. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties, and assumptions, many of which are beyond Data443’s control, and which could cause actual results to differ materially from the results expressed or implied by the statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict, and include, without limitation, results of litigation, settlements and investigations; actions by third parties, including governmental agencies; volatility in customer spending; global economic conditions; ability to hire and retain personnel; loss of, or reduction in business with, key customers; difficulty with growth and integration of acquisitions; product liability; cybersecurity risk; anti-takeover measures in our charter documents; and, the uncertainties created by the ongoing outbreak of a respiratory illness caused by the 2019 novel coronavirus that was recently named by the World Health Organization as COVID-19. These and other important risk factors are described more fully in our reports and other documents filed with the Securities and Exchange Commission (“the SEC”), including under (i) “Part I, Item 1A. Risk Factors”, in our Registration Statement on Form 10 filed with the SEC on January 11, 2019 and amended on April 24, 2019; (ii) “Part I, Item 1A. Risk Factors”, in our Annual Report on Form 10-K filed with the SEC on March 23, 2021; and, (iii) subsequent filings. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. Except as otherwise required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.
The Data443™ logo, ClassiDocs™ logo, ARALOC™ logo, ARCMAIL®, DATAEXPRESS® and FILEFACETS® are all registered trademarks of Data443 Risk Mitigation, Inc.
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Investor Relations Contact:
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919.858.6542